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BY JOE McDONALD (STAFF WRITER)
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Published: March 17, 2010

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U.S. Attorney Dennis Pfannenschmidt announces a federal grand jury indictment of Commissioner A.J. Munchak and former Commissioner Robert C. Cordaro in the William J. Nealon Federal Building Tuesday afternoon. At left is FBI special agent Janice K. Fedarcyk and at right is Troy Stemen, Acting Special Agent in Charge of IRS. Michael J. Mullen/Staff Photographer

Vowing to reform Lackawanna County government by cutting waste and cronyism, Republicans Robert C. Cordaro and A.J. Munchak broke a 20-year Democratic grip on the county commissioners office in 2004, proclaiming the days of old-time politics were over.

On Tuesday, federal prosecutors presented Mr. Cordaro and Mr. Munchak in a different light, not as reformers, but modern versions of Boss Tweed, who used the sixth-floor commissioners office in downtown Scranton to run a criminal enterprise that collectively generated at least $475,000 in kickbacks or bribes from vendors looking for county contracts.

The alleged kickbacks came from companies working at Wilkes-Barre/Scranton International Airport, planning the botched intermodal bus station in downtown Scranton that cost taxpayers almost $1 million and a cell phone tower deal at the county's 911 center.

Besides the cash, there were the perks, including a free trip to Monte Carlo that one contractor, identified as Company #8, paid for Mr. Cordaro in May 2006, and another free trip in 2004 to the Playboy Mansion that was paid for by Charles "Chuckie" Costanzo, who used some of the almost $650,000 he stole from the county's workers compensation fund, a job Mr. Cordaro gave him in a no-bid contract, according to the indictment.

An unspecified portion of the bribe money was intended as contributions to their election campaign committee, Friends of Munchak & Cordaro, contributions they never disclosed on campaign finance reports, according to the indictment.

Dennis C. Pfannenschmidt, the U.S. Attorney for the Middle District of Pennsylvania, said the federal investigation into Mr. Cordaro and Mr. Munchak started with the government's case against Mr. Costanzo, a longtime friend of Mr. Cordaro from Dunmore. Mr. Costanzo was prosecuted twice: once involving the workers compensation case that sent him to prison for five years and 10 months, the other for a pigeon dung removal project at Lackawanna County Courthouse that prosecutors claimed involved extortion attempts.

The sweeping indictment that could send Mr. Cordaro and Mr. Munchak to prison for the rest of their lives also notes five tickets, worth $250 a piece, that Mr. Cordaro accepted from "a representative of a major league baseball team" that was "seeking or had a contract with the county valued in excess of $5,000." The team is unidentified, but Mr. Cordaro was the county's sole negotiator in a deal that turned over management of the baseball team and stadium to SWB Yankees LLC, a consortium of Mandalay Baseball Properties and the New York Yankees.

Mr. Cordaro spent almost $80,000 of the bribes to buy a 2005 Chrysler sedan and a 2007 GMC Yukon, according to the indictment.

None of the cash, trips and "other things of value" was disclosed by Mr. Cordaro or Mr. Munchak on required financial interest statements filed for 2003, 2004, 2005 and 2006, the indictment states. Mr. Munchak did not disclose them on his 2007 statement. Mr. Cordaro never filed a 2007 statement. Both men never reported the cash on their federal tax returns and never paid federal taxes, according to the indictment.

According to the government's tally of cash and freebies, Mr. Cordaro's take was at least $410,000 compared with Mr. Munchak's $65,000.

In a prepared statement after the indictments, Mr. Munchak said, "The charges filed against me today are without merit and are based on untrue allegations."

"I plan to vigorously defend myself against these allegations, and I am confident that after a full and fair hearing of the facts, the truth will prevail and I will be found innocent. In the meantime, I am asking my constituents for their patience and understanding during the coming months, and I want to assure them that I will continue to serve to the best of my abilities pending the outcome of this case."

Mr. Cordaro's lawyer, William Costopoulos, was unavailable for comment. A woman who answered the door at Mr. Cordaro's house Tuesday evening declined comment.

The 40-count indictment does not identify the vendors who paid the alleged bribes and kickbacks, identifying most by number.

Mr. Cordaro allegedly accepted about $360,000 from Company #2 and another $30,000 from Company #3, the indictment states. Mr. Munchak allegedly pocketed $60,000 from Company #3.

The largest cash payments flowed from Company #2, beginning in January 2005 through January 2008, a three-year period when Mr. Cordaro allegedly accepted about $360,000. On top of that, Mr. Cordaro allegedly pocketed another $30,000 from Company #3, which allegedly also paid Mr. Munchak $60,000.

Company #2 allegedly used a middle man to pass the money from a "principal" of the company to Mr. Cordaro, the indictment states. According to the indictment, the company allegedly issued false tax forms for the years 2005 through 2008 to disguise the payments as "consulting fees." The middleman then allegedly passed the $360,000 to Mr. Cordaro either giving him cash or blank checks, the indictment states.

Company #3, which is apparently the Clarks Summit-based architectural design company Highland Associates, paid to "retain its existing contracts with the county," the indictment states. Company #3, through its three principals, paid Mr. Munchak $60,000 and another $30,000 to Mr. Cordaro.

A spokeswoman for Highland said company officials were in a meeting and not available. Highland lawyers John Appleton and Sal Cognetti were not available.

The 56-page indictment also refers to an alleged $14,000 payment Mr. Cordaro received in 2006 as part of an agreement involving "four individuals" who constructed a cell tower at the Lackawanna County 911 center.

The public corruption indictments were the first to hit Lackawanna County, and federal prosecutors indicated more may be coming. In neighboring Luzerne County, nearly two dozen government officials and contractors have been charged in an ongoing federal corruption probe.

For Mr. Cordaro, who played football at Dunmore High School and later earned a law degree at the University of Pennsylvania, the stakes could not be much higher. If convicted, prosecutors said, Mr. Cordaro, 49, who was once considered for U.S. Attorney in the Middle District of Pennsylvania, faces up to 364 years in federal prison and a $7.7 million fine. Mr. Munchak, 63, faces up to 193 years in prison and a $3.2 million fine.

At a press conference in the federal building in Scranton, FBI special agent in charge Janice Fedarcyk said Mr. Cordaro and Mr. Munchak "sold the oath of their offices to the highest bidders" and put "their own selfish financial interests" above the people they were elected to serve. She said the FBI has made rooting out public corruption a top priority.

Mr. Pfannenschmidt said the investigation is continuing.

Contact the writer: jmcdonald@timesshamrock.com

Robert C. Cordaro

Age: 49

Home: Dunmore

Occupation: Lawyer

Background: Scranton Times All-Scholastic linebacker at Dunmore High School, who graduated in 1979, and was class president; Bachelor of arts degree, history, University of Rochester, 1983; Academic All-American football player at Rochester; juris doctorate, University of Pennsylvania, 1986, once owned five radio stations, former Dunmore Borough solicitor, Lackawanna County Commissioner, 2000-2008.

Charges: 38 counts - 13 counts of honest services mail fraud and mail fraud, one count of simple conspiracy, four counts of theft or bribery concerning programs receiving federal funds, one count of conspiracy to commit extortion under color of right, four counts of extortion under color of right, one count of money laundering, one count of conspiracy to commit money laundering, two counts of engaging in monetary transactions in property derived from specified unlawful activity, one count of racketeering, one count of racketeering conspiracy, three counts of filing a false tax return, two counts of tax evasion, one count of conspiracy to commit honest services mail fraud and mail fraud, one count of forfeiture, one count of forfeiture-money laundering and one count of forfeiture-mail and wire fraud.

Anthony J. Munchak

Age: 63

Home: Scranton

Occupation: Lackawanna County commissioner, 2004-present

Background: Graduate, Scranton Central High School, 1964; bachelor's degree, accounting, University of Scranton, 1970; worked as accountant at now-defunct Arthur Andersen & Co., New York City; former top financial officer at several local firms; once owned his own medical services billing and accounting firms.

Charges: 25 counts - eight counts of honest services mail fraud and mail fraud, one count of simple conspiracy, four counts of theft or bribery concerning programs receiving federal funds, one count of conspiracy to commit extortion under color of right, four counts of extortion under color of right, one count of racketeering, one count of racketeering conspiracy, one count of filing a false tax return, one count of tax evasion, one count of conspiracy to commit honest services mail fraud and mail fraud, one count of forfeiture and one count of forfeiture-mail and wire fraud.

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I find it interesting that Highland Associates of Clark Summit has been involved in construction work in both the Lackawanna County and Luzerne County corruption scandals. Yet, there has been little information on who owns this company although it would seem rare for the same company to have no-bid contracts in both scandals.

Sing Jailbirds sing. Give up all the info you can on your crooked friends so you don't go to jail alone. I have a feeling this is just the begining. Oh what a great day in Lackawanna County, nice to see the Feds finally got here and I'm sure they will be here for a long time taking out all the corrupt "officials" here. I hope they brought out their fine tooth combs and get all these crooked bums.

What do you mean..cell? The kind of explaining that Slick Willy Clinton gave us when he said "I did not have sex with that woman?"

Or did you mean the suave explaining that Senator John Edwards gave to not only us, but to his cancer-ridden wife?

If you want to play the party mud slinging game, no problem because that mud flies in all directions. Do you see what I mean?

These are hard times for us and our nation. People have got to stop being so damn stubborn and get off the party line. That's old.We really need to elect the best qualified man/woman for the job. Stop electing slim shadies that give us bogus promises.

But then again, we really don't know what we're going to get until they're sworn in. We all hear the campaign rhetoric BS. Once they're in office, they seem to whistle a different tune.Prime example: Obama. What a load of BS he spewed.

I believe it would be a good idea if everey candidate, no matter the office, be held accountable for their promises.If they don't deliver, throw the bums out.If they make back door deals, steal, lie, and live high at the taxpayers' expense, then lock them up and throw the damn key away.

The one thing Bobby&AJ forgot to do was think-think of your families-your children, your parents-they have to live with this shame that was brought on by your selfishness and greed. You will have alot of time to think. Also it was a waste of college educations. There are people who never had the privledges that you threw away. Instead of making a difference, you ruined your family names and left the county in a big mess for hardworking people to clean up.Very disappointed

Let's not forget the almost $1 million of taxpayers money that resulted in the non-existence of the new rail/bus intermodal station. That makes me wonder who's behind no rail service for Scranton and how much it's costing to keep the trains from operating. Is there a commuter bus connection here and if so, where does it lead to and who? Could it lead to a certain rail authority that has done nothing in two decades to get the job done? With commuter buses packed daily, it's hard to beleive those who say there is no demand for rail service. Hmmmm...

Why isn't anyone mentioning Washo here? If all this really happened, it would be totally impossible for him not to know. I smell politics on the highest level here. Wouldn't it be something if it was really Joe Corcoran that did these things.

While an indictment is not a conviction this one looks like the FBI did their homework before breaking the news. I'd say that both defendants should take the time to enjoy this Christmas with their respective families - it is likely to be their last in person....their next one after that will be at Club Fed.

This is not a issue of republican and democrat. It is an issue of greed. You know one of the deadly sins. Scandals know no exact person of political interest, but of one color. GREEN!!! 9and on occasion a blank check which then the color would be off white)So for those of you who are commenting that it's about a party in it's own. Think again people. Let's put a $100 bill on a line with a pole and see who bites. I can guaranteed the question to ask while you jump for that old mighty dollar isn't what party you belong too. Hypocrites.

A. J. Munchak is really in a "pickel" now.And he has an accounting degree and made all the mistakes thatAl Capone made. You have to pay your taxes even on the ill-gottengains. How did he get homes in Florida?And how did Cordaro go from Dunmore to the Playboy Mansion & almosta million dollar home in Mt. Margaret?Name the givers of the bribes too. They belong in jail too.

We love you Bobby?!?! Really?? Come on! I'm doing cartwheels, this is like an early Christmas gift! I feel as though finally some justice is going to be served and for once maybe, just maybe, that smuck can wipe that ridiculous grin off his face!! And Munchak.. do the County a favor and just resign. Don't even try and start to be a hero now... your just a joke!

Whatever happened to the 12 million dollars in the tax office?What bank has had that & what happened to all the interest on the12 million?Why didn't the communities realize they didn't get their sharewhen it was time for it to be divided?Where is the check & balances needed for honesty?Is everyones head in the sand for years?It is about time the pot boiled over.